Cree, Inc. has announced the acquisition of Ruud Lighting, Inc. at an estimated net cost of approximately $525 million. Combining two highly complementary LED innovators, the acquisition allows Cree to extend its leadership position and increase the adoption of energy-efficient LED lighting. The companies’ shared focus on best-in-class LED-based systems has led to thousands of LED lighting installations over the past several years.
This acquisition creates a market leader for indoor and outdoor LED lighting, accelerating adoption and expanding the market for both Cree’s LED systems and components. Other synergies include increased access to the lighting market through expanded sales channels and operating leverage from increased economies of scale. Through a broader presence in the lighting systems market, Cree gains additional knowledge and expertise to develop the next generation of industry-leading, lighting-class LED components.
Ruud Lighting will continue to be based in Racine, Wis., and will operate as a subsidiary as part of Cree’s lighting business. Additionally, Alan Ruud, chair and CEO of Ruud Lighting, has joined the Cree board. Ruud Lighting, through its BetaLED product line, was one of the first traditional lighting companies to transform the majority of its business to LED-based systems.
Cree acquired all of the outstanding stock of Ruud Lighting for an estimated net cost of approximately $525 million, comprised of $372 million in cash, $211 million in stock (valued at today’s market closing price of $34.74/share), $85 million paid concurrently with the acquisition to retire outstanding debt, offset by tax benefits noted below. The stock portion is comprised of 6,074,833 Cree shares. The acquisition was structured for tax purposes as a deemed asset purchase, which means the cost to Cree will be offset by approximately $143 million of expected future tax benefits related to the acquisition.
